Little in the way of comment need be added to the facts shown in the foregoing statement. Every State named shows an increase, in the value per acre, of its agricultural lands between 1870, itself a year of inflated currency and for the time abnormally high values, and 1890, a year of moderate prosperity and normal business conditions. Every State but Ohio shows an increase between 1880 and 1890, and in the case of the exceptional State the decrease shown is so slight as to be well within the recognized possibility of error. The twelve States named had 256,586,994 acres of farm land in 1890, and the table shows that the average acre of farm land was worth $3.75 more than in 1870. This increase, applied to the total acreage, shows an aggregate augmentation of value amounting to $962,201,228, or $18,316 for every mile of railway constructed in those States during the two decades. The increase from 1880 to 1890 was equal to $28,399 for each mile of line constructed between those years. Of course it is not intimated that this upward movement in agricultural land values is wholly attributable to railway construction. It is clear, however, that both have moved forward together; they are linked by economic ties that are evident to all, and unquestionably the existence of adequate railway facilities is an essential preliminary to the profitable exploitation of even the best natural, inland, agricultural resources.

Differences between prices received by farmers for their products, and those paid by consumers for the same articles, express the sum of cost of transportation, plus all expenses of handling, and the interest and profits received by the middlemen. The general consequence of the development of transportation facilities has been in accordance with this generalization. As transportation has been progressively cheapened, the prices received by farmers, and those paid by consumers, have moved toward each other. This is wholly true with regard to the production and consumption of particular localities, and is also true of production and consumption in general, if the assertion is limited to the last twenty years. When railways were being most rapidly extended into previously unoccupied territory, and thus naking available, for agricultural purposes, new and especially dertile land, the first tendency was to reduce the average cost of

each form of agricultural production while increasing the distance separating producing from consuming regions. As the reduction in cost of transportation, per mile, was not, at first, commensurate with the increase in distance, there was a temporary increase in the absolute cost of transportation for some staple products, accompanied by a corresponding reduction in the farm price. As this stage of progress was marked by a rapid movement of population toward the regions thus opened to agriculture, it is reasonably clear that it could not have been accompanied by a lower rate of profit in the agricultural industry. This stage was, however, one of transition and could not long persist. The transportation rate was steadily declining, and as the distance could not continually increase, the former movement quickly and completely offset the latter, and before very long there was a substantial balance accruing to the producers of farm products.

Unfortunately statistics of farm prices are meagre and unsatisfactory, and comparisons are scarcely practicable. The United States Department of Agriculture annually collects the prices prevailing in local markets, on the first day of December, and from these data establishes averages which unquestionably represent very accurately the true values of agricultural products on the particular date of each investigation. The Department does not, however, claim that they show the fluctuations of the different seasons or represent the real values of the successive crops. Comparisons between the farm prices, thus obtained, and the annual average export prices, compiled by the United States Treasury Department, throw some light upon the changed relation between farm and export values. The average farm price of corn, on December 1, 1877, was, expressed in gold, 34 cents per bushel, and the average price of corn exported during the fiscal year ended June 30, 1878, was 56 cents per bushel. The farm price on December 1, 1897, was 26 cents and the corresponding export price was 36 cents. The difference was, therefore, 22 cents per bushel in 1878, and but 10 cents two decades later. The average farm prices of wheat on December 1, 1877 and 1897 were $1.03 and 81 cents respectively, and the corresponding annual averages of export prices were $1.33 and 98

cents; the difference declining from 30 to 17 cents per bushel. It would be as absurd to assert that these data throw no light upon the relative situation of farmers and consumers, as to attempt to underrate the essential limitations in their application and the very evident margin of error.

That a close economic relation exists between the agricultural and the transportation industries, as they are conducted in the United States, is established by the foregoing outline, and is otherwise fully evident to anyone who cares to study either of these great industries. Nor is it very difficult to realize the character of this economic connection, whether the subject is approached from the point of view of the agriculturist or that of those engaged in furnishing transportation. Clearly to apprehend this relation it is necessary, however, to perceive that neither utility nor value attaches to any commodity except as that article is available for the satisfaction of human desires. To quote Jevons: "It is only then, when supplied in moderate quantities, and at the right time, that a thing can be said to be useful. Utility is not a quality intrinsic in a substance, for, if it were, additional quantities of the same substance would always be desired, however much we previously possessed. We must not confuse the usefulness of a thing with the physical qualities upon which the usefulness depends."

One more condition than is enumerated in the first sentence of the foregoing, though no doubt taken for granted, is a prerequisite of utility. A thing must not only be supplied in reasonable quantity, and at the right time, but at the right place as well, before it can be useful. It was by no means uncommon, a century or two ago, for the inhabitants of one region to suffer the pangs of unsatisfied hunger, while not far away the productions of abundant harvests were wasting and yet unavailable to the famine-stricken because transportation was impracticable or too costly. The surplus wheat of the great northwestern region of the United States, and nearly all of the cotton of the Gulf States, would be of no utility, and consequently of no value, if they could not be transported to other regions. Under modern conditions the railway is, in most cases, the only adequate means 1Money and the Mechanism of Exchange, N. Y., D. Appleton & Co.-1896, p. 9.

of transportation. The existence of railways is then an essential condition of the agricultural industry, as now conducted in the United States. On the other hand, the railways are by no means independent of those who produce the commodities which they carry. Traffic is the substance upon which the railway system subsists and traffic cannot be furnished except by producers; to have abundant traffic producers must be numerous, prosperous and satisfied. But producers will not multiply, they will not enjoy prosperity, they will not be contented unless they receive what they regard as fair wages and a reasonable return upon their capital. Such returns from their industry imply fair prices in local markets, and the latter, for these are practically those paid by consumers, less the price of transportation, are dependent upon reasonable railway charges. Thus the development of the territory contiguous and tributary to a railway is dependent upon fair rates for the movement of the products of that territory to the ultimate markets. The progress of railway construction and the accompanying development of agriculture outlined in this paper, together constitute, in many respects, a monument to the enlightened perception of this fact, by those who have had the direction and supervision of the great industry of moving persons and property by means of the steam railways of the United States.

U. S. Census Office, Division of Agriculture.

H. T. NEWCOMB.

EXPERIENCE OF THE DUTCH WITH TROPICAL

LABOR.

II. ABOLITION OF THE CULTURE SYSTEM AND TRANSITION TO FREE LABOR.

N the preceding number of this REVIEW the writer described the culture system as applied by the Dutch in Java during the early part of this century. The system was shown to have been introduced to meet the fiscal needs of the Dutch government and to have been maintained and extended solely for the sake of the profit that it returned. It was shown to contain faults, inseparable from its nature, that resulted in a weakening of the productive powers of the people, and a corruption of the politi- . cal organization. The purpose of the present paper is to narrate events in Java and in the Netherlands that led to the reform of the culture system, and to describe the organization of labor that has replaced it, and under which production is now carried on.

The effect of the system on the individual native was discussed so fully in the preceding paper that it is proper to be brief in describing the catastrophes that marked its decline in Java. The culture services, borne in addition to land tax and heerendiensten (services due to the government for building roads, forts, etc.), proved to be a burden that was intolerable in those parts of the island that were not specially favored by nature. In the course of time a movement of population was set up from the districts in which the system had been introduced to government lands not subject to it and to the lands held by private individuals. Populous regions lost as much as one-half or twothirds of their inhabitants through emigration. The residency of Japara lost in the first half of the year 1841 alone over 2,000 people, who were escaping from the burden of forced. services. Some villages came to have no other inhabitants than the head men. Those who remained at home suffered from recurrent famines and pestilences, due to the diminished food supply. The natives were not left time or land enough to raise their food, and were not given wages enough to buy it. That